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Finance Management
Q1. What do you understand by Internal Audit ? How do the functions of an internal
auditor differ from that of External Auditor ?
Q2. Explain the consistency concept and Accrual Concept of Accounting. How is the
Accrual Concept adhered to while preparing the final accounts of a company ?
Q3. What are intangible assets of a firm ? Why are they shown in the Balance
Sheet ? What
is meant by amortisation of such assets ? Give reason for the same.
Q4. What do you understand by Appropriation of profit of a company? How are the
profits
appropriated ? How will the profits to be appropriated, affected, if the company
issues debentures, instead of equity shares to finance its activities ? Discuss how?
Q5. Distinguish between:
a. FIFO and LIFO methods of Inventory valuation.
b. Rights Shares and Bonus Shares
c. Direct Material Price Variance and Direct Material Usage Variance
d. Imputed Costs and Opportunity Costs.
Q6. What do you understand by Break-even analysis ? Discuss the assumptions
underlying the break-even analysis. How do these assumptions make the breakeven analysis unrealistic ? Explain and prepare a Break-even chart assuming
relevant figures.
Q7. What do you understand by Flexible Budget ? How does it differ from a Fixed
Budget ?
Explain its utility to a business organisation.
Q8. What do you mean by Control Ratios ? Explain the three important control ratios
and discuss their significance.
Q9. Explain fully the following statements :
a. Operating cycle plays a decisive role in estimating the working capital
requirement
of a firm.
b. As there is no explicit cost of retained earnings, they are free of cost.
c. Depreciation acts as a tax shield
d. An investor in shares considers not only its E.P.S. but also P.E. Ratio.

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